Google shares dive in disastrous day

Trading is halted for hours after the company's earnings are released early accidentally. Other Internet stocks fall in response.

By Jonathan Berr Oct 18, 2012 2:07PM
Shares of Google (GOOG) plunged Thursday and were halted after the company's disappointing earnings were accidentally released several hours early. Many other Internet stocks were falling as well.

The company said that its financial printer, RR Donnelly (RRD), released the information early without authorization. Investors panicked at the early notice, taking shares from about $754 to as low as $676. Google responded by requesting that shares be halted, and they were for more than two hours. Shares resumed trading in the afternoon and closed down 8% to $695. 
Google execs didn't have much to say about the fiasco in Thursday afternoon's earnings call. "I'm sorry for the scramble earlier today," said Larry Page, whose voice was unusually raspy after a bout of illness. "We had a strong quarter," he added. "I'm really happy with our business."

Investors, however, did not feel the same way. The search giant's profit fell to $2.18 billion, or $6.53 per share, from $2.73 billion, or $8.33 per share, a year earlier, according to the filing, which was mistakenly posted on the SEC's website. Excluding one-time items, profit was $9.03 a share, widely missing the $10.65 per share analysts expected.

Revenue rose to $14.01 billion as Google reaped the benefits from the acquisition of Motorola Mobility. Excluding traffic acquisition costs, the fees paid to Google's partners, revenue was $11.33 billion -- far below the $11.86 billion analysts expected.

The results had plenty of worrisome items. The average cost per click fell by 15% from a year earlier and declined 3% over the second quarter. Traffic acquisition costs rose to $2.77 billion, equaling 26% of revenue, up from 24% in the third quarter of 2011. The company reported total costs of $11.4 billion versus $6.67 billion a year earlier.

Google wasn't the only stock hurting. RR Donnelly, the financial printer that released the information early, saw shares fall a bit less than 1%. Facebook (FB) shares closed down 4.6% and Apple (AAPL) traded down 1.9%. Curiously, one of Google's more interesting competitors, Yahoo (YHOO), was barely affected, and saw shares close down 0.6%. 

Jonathan Berr does not own shares of the listed shares. Follow him on Twitter @jdberr
 

More from Top Stocks


26Comments
Oct 19, 2012 8:31AM
avatar
The smart people see a buying opportunity - everyone else sell your earnings away !
Oct 19, 2012 12:39AM
avatar
Google can't control their data but they're really good at palgarizing web content to fuel their socialism.  That's poetic justice nd the announce a tablet that runs that Chome POS  for $249 but it's not worth $49.
Oct 18, 2012 6:19PM
avatar

SRT DRIVER' I don`t know what planet but we`ve never had it so good.Our business is growing

the market is up 66%, 1 war is over and the other ends in 2014.Bin ladenis dead and GM

is alive and well.We have 31 straight months of job growth.Wake up and smell the

coffee, these are the good ol days.

Oct 18, 2012 6:01PM
avatar

Goggle's disatrous day???!!! what 'bout America's disatrous 4yrs under the uber-marxist obama regime!!! well a few more wks and they're history,

 

 look! look at the horizon lib whackos! see those ominus dark clouds, they're coming for you! a storm of biblical proportions is coming closer and closer to wipe out you and the democrapic party in general. oh the cataclysm looming is something you're not even gonna believe!!!

 

to put it simply for you so-called intellectuals aka blithering stalinist idiots, you're Dorothy in the Wizard of Oz and the Romney campaign is the gigantic twister blowing her house into oblivion and beyond, not only is obama done, finished, completed, over and done, stick-a-fork-in-his-commie-azz done, but the democrapic party in general will be shattered, decimated, annihilated, because this election encompasses more than just the presidency and everybody knows it, and yet nobody speaketh this truth, everybody's all hell bent on the latest polling data and what it means, BULLSHIIITT!!! I don't need a poll to show me what's a comin' hehe

Oct 18, 2012 5:48PM
avatar
Tsk. Tsk. Tsk. Somebody just made some illicit profits today. Naughty. Naughty. Naughty.
Oct 18, 2012 5:40PM
avatar

Surely someone captured a video of one of those babies trying to “Actively Trade” their way to profit through this step function collapse using their whip-smart tools from the eTrade website. I would love to see that. I got a feeling there’s going to be a load of diapers getting washed tonight.

 

Barring that, can someone at least post a pic of the mushroom cloud over hedge fund hotel in Stamford, CT?

 

Let’s hear it for High Frequency Trading liquidity. I bet I know which side of this collapse they were trading on.

 

P.S. That's why it happened.

 

 

Oct 18, 2012 4:25PM
avatar

in other news today, Barry Obama whizzed away another $4 billion in interest payments to US creditors.

 

Welcome to Obamaville.

Oct 18, 2012 3:10PM
avatar

My heart bleeds for you, Google. I think you are fine @ $700 per share. MSN and all media covering the stock market need to have their heads checked. This isn't newsworthy, it's just absolute greed.

Oct 18, 2012 2:48PM
avatar
OMG! They made a profit but not enough for me to buy the 120 yacht, I'll have to settle for the 118 foot one instead. All is lost! I might as well drink this poison now...
Oct 18, 2012 2:38PM
avatar
Gee just a few weeks ago the "experts" were saying what a great stock this was!  Once again, there are not experts in this financial mess just someone with an opinion.  This market is oversold, over-hyped and falsely being propped up.  So why did they halt trading?  If the market was going up 10% the market would be "cheering" saying we are in a economic recovery etc.  Wall ST. is nothing more th****galized rigged Ponzi scheme and all involved should be thrown in jail. 
Oct 18, 2012 2:37PM
avatar

Maybe the forecast was skewed?  Seriously, they're still turning a profit.  Revenue is up 20% and people are selling like it's 1929????  WTF?

 

I don't understand the sell off.

Oct 18, 2012 2:23PM
avatar

And it all happens in minutes. And as usual, the Mainstream Media has no idea why it happens this way. Welcome to the new step function market action. Looks like GOOG is taking a bunch of other hot money stocks with it too, i.e., Facebook, APPL, etc. The hedge fund hotel is on fire. So much for all that liquidity those HFT algos supposedly provide.

 

Can’t someone post a pic of the mushroom cloud over Stamford, CT?

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125
125 rated 1
267
267 rated 2
455
455 rated 3
612
612 rated 4
682
682 rated 5
695
695 rated 6
632
632 rated 7
472
472 rated 8
279
279 rated 9
147
147 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
VZVERIZON COMMUNICATIONS9
TAT&T Inc9
CTLCENTURYLINK Inc8
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.